Canadian Mining Companies and Corporate Accountability

Canadian multinationals beware: Your home and native land may now be the forum of choice for plaintiffs seeking to bring international human rights lawsuits.

In November, Canadian mining firm, Nevsun Resources, was sued in a Vancouver court by three Eritrean refugees alleging that Nevsun “aided, abetted, contributed to and became an accomplice to the use of forced labor, crimes against humanity and other human rights abuses” at an Eritrean mine.  The Nevsun case is just the most recent human rights suit to appear in Canadian court, where the alleged harm was committed by a Canadian corporation operating abroad.

The allegations

The Eritrean plaintiffs are former employees of the Bisha Mining Share Co. (BMSC), a project jointly-operated by Vancouver-based Nevsun and the Eritrean state-owned Segen Construction.  Prior to their employment at BMSC, the plaintiffs were conscripted into the Eritrean army as part of Eritrea’s much-criticized national service program.  In 2013, Human Rights Watch (HRW) linked the Eritrean service program, which requires all able-bodied Eritrean men and most women to either join the military or work for state-owned companies, to the mass exploitation of workers in Eritrea’s burgeoning mining sector.

At BMSC, the plaintiffs claim they were made to work grueling hours under deplorable conditions, for insufficient compensation, and without proper medical care, shelter or food.  The conscripted Eritreans were forcibly confined to the mine -- separate from the foreign workers -- and under persistent watch by security personnel.  If they left the mine site without authorization, plaintiffs claim conscripts were subjected to severe punishment.

According to the complaint, forced labor is so widespread and inhumane at BMSC that it constitutes a crime against humanity.

Nevsun responded to the suit by claiming the allegations were unfounded and that the Bisha mine has consistently adhered to “international standards of governance, workplace conditions, and health and safety.”  Nevsun further claims that, since 2009, it has had in place procedures to ensure that forced labor does not exist at the Bisha mine.  As the author of the aforementioned HRW report pointed out to The Guardian, “It will be hard to take [Nevsun’s assurances] very seriously if the company reacts to this lawsuit by insisting that the problem never existed to begin with.”  In fact, the 2013 HRW report called out the company by name, warning that “Nevsun’s experiences show that by developing projects in Eritrea, mining firms are walking into a potential minefield of human rights problems.”

Mining in a pariah state

Human Rights Watch characterizes Eritrea as a “pariah state” operating a “uniquely abusive program of indefinite forced labor.”  Though the country’s national service program was initially meant to last just 18 months, it has devolved into a program of perpetual imprisonment, with conscripts now fated to work for the state indefinitely and under the constant threat of violence.  In recent years, the conscript program has been used to supply labor for a growing number of international mining projects that are seeking to exploit the country’s heretofore largely unexplored mineral resources.

Nevsun, like most international mining companies seeking to operate in Eritrea, was forced to partner with a state-owned entity, Segen Construction, which purportedly stymied Nevsun’s attempts to investigate allegations of forced labor (which came as a result of the 2013 HRW report).

Last week, the U.K. parliament offered its own critique of the Eritrean government’s labor policies, passing an “early day motion” signed by 41 MPs and calling on Eritrea to allow an investigatory visit from the United Nation’s Special Rapporteur on the situation of human rights in Eritrea.  The motion cited Eritrea’s practices of “arbitrary arrest and detention and compulsory military service,” which have contributed to an “exodus of Eritreans, now reaching 5,000 a month,” fleeing the country for Europe.  The MPs also called attention to the “collusion” between the Eritrean government and “international mining companies from the U.K., Canada and Australia,” which have leveraged the government’s forced labor program to their benefit.

A growing trend in Canada

The Nevsun litigation follows a series of other high-profile human rights cases filed in Canada by foreign plaintiffs against international mining companies.  The first cases of the type were brought in Ontario in 2010 against Toronto-based mining firm Hudbay Minerals.  In three related lawsuits against Hudbay, members of the indigenous Mayan Q'eqchi' population in El Estor, Guatemala, allege that Hudbay and its wholly-owned subsidiaries were complicit in murder, shooting and gang-rape committed by security forces operating at Hudbay’s open-pit nickel mine in eastern Guatemala.  In July 2013, an Ontario judge ruled that the case could proceed to trial in Canadian court.

More recently, in June 2014, seven Guatemalan men sued Tahoe Resources, another Vancouver-based mining company, for shooting injuries suffered when Tahoe security personnel fired at them at close range.

Commentators have suggested that the 2013 Hudbay ruling could help plaintiffs in the Tahoe and Nevsun cases, and potentially open the door to other cases against Canadian companies accused of committing human rights abuses overseas.

This is particularly important because the door appears to be closing to foreign plaintiffs elsewhere in the world.

According to the Business & Human Rights Resource Center, the majority of the 108 legal cases profiled by the Center relate to extraterritorial claims arising in countries with weak, corrupt or nonexistent judicial systems.  Yet, in many companies’ home countries -- that is, the countries in which they are based -- surviving jurisdictional challenges to extraterritorial claims can be near impossible.

In the United States, where the Supreme Court’s 2013 decision in Kiobel v. Shell drastically limited the jurisdictional scope of the Alien Tort Statute and the viability of claims concerning human rights abuses allegedly committed abroad, this is especially true.  The vast majority of appellate and district courts to consider extraterritorial claims in the wake of Kiobel have sided with corporate defendants, leading Bloomberg to declare last month: “U.S. corporations [are] winning [the] fight over human rights lawsuits.”

Image credit: Flickr/rene-germany